Annotated GST Act – Chapter 4 – part 4-7 – Special rules mainly about returns, payments and refunds – Divisions 162 – 171

ACN 154 520 199 Pty Ltd (in liq) and Commissioner of Taxation [2019] AATA 5981 – GST – input tax credits – gold industry – creditable acquisition – whether applicant made first supply of that precious metal after its refining – meaning of precious metal – meaning of refining – whether ordinary or trade meaning – interpretation of word in statutory context – general anti-avoidance provisions – whether taxpayer engaged in scheme – whether taxpayer obtained a GST benefit – whether an entity that entered into or carried out the scheme or part of the scheme did so with the sole or dominant purpose of the taxpayer getting a GST benefit from the scheme – whether the principal effect of the scheme or of part of the scheme is that the taxpayer gets the GST benefit from the scheme – round robin arrangement – objection decision regarding assessments of net amount of GST affirmed

Commissioner of Taxation v Unit Trend Services Pty Ltd [2013] HCA 16 – the GST benefit of the taxpayer was not attributable to the making of a choice, election, application or agreement (collectively a “choice) that is expressly provided for by the GST Act – at [50]: the question is to be addressed by the statutory construction of the words “not attributable” and the phrase is concerned with whether the GST benefit in question, which (ex hypothesis) has been got from the scheme, is not one to which the exercise of a statutory choice has entitled the taxpayer (Case analysis)

VCE and Commissioner of Taxation [2006] AATA 682 – at [65]-[77]: “whether GST benefit attributable to the making of a choice, election, agreement provided under the GST Act”, registration for GST an election but the GST benefit was not attributable to the act of registration, registration on accruals basis not a choice or election – at [78]-[80]: whether GST benefit the “sole or dominant purpose” or “principal effect” of the scheme – at [133]: taking into account all the criteria in s 165.15, reasonable to conclude that the entity entered into or carried out the scheme with the sole or dominant purpose of getting a GST benefit

International Cases

The University of Huddersfield Higher Education Corporation v Revenue & Customs [2016] EWCA Civ 440 – whether a VAT-saving scheme is invalidated by reason of the EU principle of abuse of rights – whether the transactions resulted in an accrual of a tax advantage which would be contrary to the purpose of the VAT Code – whether the essential aim of the transaction was to establish a tax advantage

Revenue & Customs v DPAS Limited [2015] UKUT 585 – exemption – whether dental payment plan administrator provided services to patients for consideration – whether services exempt transactions concerning payments or transfers or standard rated debt collection – whether to refer questions to CJEU or stay case pending decision in Bookit II and NEC – if exempt whether change in contractual arrangements from 1 January 2012 abuse of law – appeal allowed in part and stayed – first instance – [2013] UKFTT 676

Revenue and Customs v Pendragon plc [2015] UKSC 37 – whether a scheme relating to demonstrator cars used by retail distributors for test drives and other internal purposes whereby input tax credits could be recovered on the purchase of the car but output tax was voided when the car was sold second hand to a consumer was an abuse of law – discussion of the application of the principle of abuse of law to tax avoidance schemes – whether the essential aim was to obtain a tax advantage

Education Administration Limited v Commissioner of Inland Revenue [2010] NZHC 663 – anti-avoidance

Glenharrow Holdings Ltd v CIR [2008] NZSC 116 – second hand goods, input tax credit, anti-avoidance

Weald Leasing Ltd v Revenue & Customs [2007] UKVAT V20003 – VAT – AVOIDANCE – Abuse of rights – Appellant associate of exempt trader purchasing assets to lease to separate company to lease on to exempt trader – Associate outside VAT group – Associate credited with input tax on purchases – Insertion of separate company avoided direction under VATA 1994 Sch 6 para 1 – Purpose of transaction to avoid or defer VAT of exempt trader – Halifax ECJ [2006] STC 919 considered – Purpose of legislation – Whether transactions contrary to purpose – Redefinition of transactions if abuse – Appeal allowed

Ch’elle Properties (NZ) Limited v Commissioner of Inland Revenue [2007] NZCA 256 – anti-avoidance – application for leave to appeal denied – [2007] NZSC 73 – first instance – [2005[ NZHC 190

Principal and Fellows of Newnham College in the University of Cambridge v Revenue and Customs [2008] UKHL 23; [2008] 2 All ER 863; [2008] 1 WLR 888 – anti avoidance, licence to occupy library, meaning of ‘occupation of land’

Rulings and Determinations

GSTR 2010/1 – Austlii – Goods and services tax: application of Division 165 of a New Tax System (Goods and Services Tax) Act 1999 where a land owner engages the services of an associate to arrange construction of residential premises for lease under an arrangement described in Taxpayer Alert TA 2009/5

GSTR 2005/5 – Austlii – Goods and services tax: arrangements of the kind described in Taxpayer Alert TA 2004/8: use of the Going Concern provisions and the Margin Scheme to avoid or reduce the Goods and Services Tax on the sale of new residential premises

GSTR 2005/4 – Austlii – Goods and services tax: arrangements of the kind described in Taxpayer Alerts TA 2004/5 and TA 2004/7: use of the Grouping or Margin Scheme provisions of the GST Act to avoid or reduce the Goods and Services Tax on the sale of new residential premises

GSTR 2005/3 – Austlii – Goods and services tax: arrangements of the kind described in Taxpayer Alert TA 2004/9 – exploitation of the second-hand goods provisions to obtain input tax credits

GSTR 2004/3 – Austlii – Goods and services tax: arrangements of the kind described in Taxpayer Alert TA 2004/2: Avoidance of GST on the sale of new residential premises

165.10 When does an entity get a GST benefit from a scheme?

Cases

VCE and Commissioner of Taxation [2006] AATA 682 – at [40]-[50]: definition of “scheme” – at [50]: scheme to be identified without reference to purpose until s 165-(1)(c) considered – at [54]-[63]: when entity “gets a GST benefit from a scheme”, consideration of counterfactuals and what reasonably would be expected to occur apart from the scheme

165.15 Matters to be considered in determining purpose or effect

Cases

VCE and Commissioner of Taxation [2006] AATA 682 – at [82]: consideration of matters in paragraphs (a)-(l), reflects Part IVA of ITAA and other than (k) and (l) expressed in objective terms and are not linked to entity’s subjective intention or purpose – at [90]: paragraphs (k) and (l) may extend to subjective purpose

Subdivision 165B – Commissioner may negate effects of schemes for GST benefits

165.40 Commissioner may make declarations for purposes of negating avoider’s GST benefits

Cases

VCE and Commissioner of Taxation [2006] AATA 682 – at [134]: the use of the word “may” is consistent with a conclusion that the Commissioner has a discretion to make a declaration – at [135]-[136]: consideration of limits of discretion, input tax credit not a bounty but an alleviation of the burden borne in paying for goods and services – at [137]-[138]: appropriate to exercise discretion, the burden of GST and its alleviation did not fall as the GST Act intended because of the scheme

165.45 Commissioner may reduce an entity’s net amount or GST to compensate

165.50 Declaration has effect according to its terms

165.55 Commissioner may disregard scheme in making declarations

165.60 One declaration may cover several tax periods and importations

165.65 Commissioner must give copy of declaration to entity affected

Division 168 – Tourist refund scheme

168.1 What this Division is about

168.5 Tourist refund scheme

168.10 Supplies later found to be GST-free supplies

Division 171 – Customs security etc

171.1 What this Division is about

171.5 Security or undertaking given under section 162 or 162A of the Customs Act